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Analyst: Xbox "generates" $2 billion in losses for MS. Hides it with patent royalties

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D

DragonSworne

Banned
Prince Vultan said:
Oh dear... so all that fan bluster about how much profit Xbox is making for MS I've been reading for the past gen has been bullshit?

Will be sure to keep that in mind for future reference :)
Click to expand...

Yep, which is funny since the success was usually attributed to Kinect, but even that was a bust.

Makes one wonder why they even include Kinect in the Xbox One if it didn't make them money? I think it's for the data gathering capabilities. Data gathering = big money
 
T

twofold

Member
vcc said:
The interesting question is if one or the other bow out; who will buy the remnants? Could you imagine if Valve bought up the remnants of the xbox brand and joined the console wars in earnest?
Click to expand...

Why would Valve, or anyone, want to do that?

Valve's approach with Steam Machines is pragmatic, sensible, and low risk with a potentially high reward. Sony and Microsoft's approach with their consoles, on the other hand, seems very risky.

Valve has it right. Their approach, to me, makes a lot more sense. They shouldn't be entering the console wars at all. They should be doing their best to stay out it, if anything.
 
S

Sandfox

Member
Tobor said:
If MS and Sony were both to fail, that wouldn't give Nintendo a "Get out of Doomed" card. It would mean the console business as we know it is doomed.
Click to expand...

All the devs would just move to Nintendo and whoever else makes a console so I don't think things would change too much.

Maxrunner said:
As long as they sell Rare back to big N i'll be happy....
Click to expand...

Rare is done and going back to Nintendo would probably get them working on the type of games they used to but the quality probably wouldn't be there.
 
V

vcc

Member
twofold said:
Why would Valve, or anyone, want to do that?

Valve's approach with Steam Machines is pragmatic, sensible, and low risk with a potentially high reward. Sony and Microsoft's approach with their consoles, on the other hand, seems very risky.

Valve has it right. Their approach, to me, makes a lot more sense. They shouldn't be entering the console wars at all. They should be doing their best to stay out it, if anything.
Click to expand...

There is more to the brand than just the hardware and studios. Xbox has brand recognition, corporately has contacts and relationships with manufacturers and distributors and retail. If the price is right that could save the years of work and billions of dollars required to build that stuff out.

Valve is just dipping their toes in right now; the problem with licencing others to make your machine like the 3DO is that its guaranteed to be more expensive in comparison because the manufacturers needs to take a cut off the top; they don't get a slice of the software sales which Sony, MS, and Nintendo use to competitively price their machines.
 
J

JohnsonUT

Member
Cow Goes Moo said:
you can't buy brand power, xbox has that
Click to expand...

I would argue, with the losses, MS has bought brand power.



The losses reported here are not hard to imagine. The original Xbox was never profitable and the 360 cost a lot early on and then had the RROD problem. As soon as the 360 finally started to become profitable, MS had to invest a lot of money into Kinnect and market the hell out of it. They also had to rush this entire process because nobody was expecting the Wii to do what it did. After Kinnect, they had to ramp up the R+D into the Xbox One and secure all sorts of deals (exclusive DLC, exclusive games, exclusive services) and are now ramping up the marketing big time. It will be at least a couple years before the Xbox One is profitable in a fiscal year. How many years of profitability will it have before the R+D process has to start again?
 
E

EGM1966

Member
DeejayKnight said:
That is absolute craziness, but I wouldn't deny them doing it to own the living room.
Click to expand...

Out of curiosity, do you think the bolded is even possible anymore? I'll admit I don't : I think tablets and Smart TVs alone never mind phone and other mobile devices have now rendered this a false goal.

Do you think there really is a huge worldwide market for a single device like the XB1 sitting under your TV?

I'm currently of the view MS whole console strategy may have been a wrong move for the company vs other options they could have taken : for example looking at what Valve is doing makes me realize they could have taken a more interesting approach originally.
 
I

IvorB

Member
Prince Vultan said:
Oh dear... so all that fan bluster about how much profit Xbox is making for MS I've been reading for the past gen has been bullshit?

Will be sure to keep that in mind for future reference :)
Click to expand...

I know. And everyone was so convincing. I totally believed it and now this (if true). Who would have thought?
 
M

Mass Effect

Member
animlboogy said:
Well they already have prominent investors saying "get rid of it," those stories have been circulating for months. I guess the question now is what Ballmer's replacement thinks of all this, and if he's pro-Xbox/hardware division, how much the investors are willing to lean on him over this.
Click to expand...

Yeah I know, but I don't think Balmer or Gates will be willing to give it up that easily yet. I would imagine that if the Xbone doesn't at least make a decent profit this generation that the division might have a harder time justifying itself. But I guess we'll see. It's going to be an interesting generation.

LCfiner said:
Yup, that’s absolutely the big question and that’s why I’m really interested to see who becomes MS CEO and how the Xbone does in the market this coming year.

Not that I think that a single year will determine the Xbone’s fate but if it’s wildly popular or wildly unpopular, it could swing decisions a certain way.
Click to expand...

Of course, but a year is all it takes to set a tone for the entire generation. Look what happened to Sony. They turned it around, but it took years and a lot of reinvestment into the PS3 (the slim, bolstering of first-party offerings, PS+, improvement of PSN). And it also helped that MS sort of slumped off in the later half of this generation.

But that tone for MS is pretty similar to that of Sony during the PS3 launch. The bad PR, their system being more expensive, the competition having the better multiplats, etc. Of course none of this might matter at all in the long run, but the opportunity for Sony is there to "win" this generation.

And if, somehow, there is another RRoD-type issue with the Xbone, I think it would be safe to say that it might be over for the Xbox.
 
S

Sydle

Member
EGM1966 said:
I could see them getting out of consoles if only to put even more focus on tablets/mobile/phones.

At this point I think the goal MS was after with Xbox is no longer achievable, particularly worldwide. The idea of a single entertainment hub is nonsense now I'd argue. The closest thing to that is your router - that's the single point of connection for the home now.

Most people will have many devices and routes to internet & services and TBH rather than a device for the future to me the XB1 looks like a device for a future that never happened - a curio in many ways.

On the other hand MS badly, as in really, really badly, missed the tablet/smart phone market and it clearly needs to be successful there way, way more than in home console market for playing games with some additional services as a plus on the side.

Smart TVs will only continue to expand in marketshare too, making the idea of firing up a console to access something like Netflix or HBO rather odd - not to mention a waste of electricity - vs just accessing the service directly from your TV via your internet connection.

Not that I think the XB1 is doomed per se, or that MS couldn't make a decent go of being in home console space - but I think it really could be argued that the value of Xbox to the company overall is starting to look iffy in terms of being of any real strategic value.

A lot, I believe, is going to hinge on the new CEO and how he decides to fix MS biggest issue, weak OS share in tablets/mobile : diverting resources/engineers and budget from Xbox - such as buying exclusive access to TitanFall - to allow greater bandwidth for tablets/mobile could look very appealing I suspect.

The sales and reception of the XB1 vs the PS4 will also be a factor of course, and I suspect in particular if the signal from the market is the main interest in such devices is first and foremost for games : if that's the case, and considering the huge 180 from the original direction for XB1, again it would lend weight to the idea of bailing out of a market that's not going in the direction MS want or is useful for them strategically.
Click to expand...

Hmmm....I don't think being the single entertainment hub has been the long-term consumer entertainment goal for a few years now. It seems it's more about building up the service concept of Live Anywhere (games, movies/tv, music, etc.), which they announced years ago, across a number of devices. Recall the 3 screens and a cloud strategy from the early 2000s.

The living room isn't going away, so it makes sense to have a device available there and Microsoft thought it was the best place to enter the market. They were too narrowly focused on it, but it would be monumentally stupid to pull out of the living room if they want to be in the video game industry at all. Why? Because Google and Apple are and will continue to make inroads across all devices.
 
C

cmgfender

Banned
ThoughtsOfSpeaking said:
And by "a lot of momentum" they mean. "More than previous levels of sales" right?

Thats my thinking. It wont be enough just for Microsoft to keep pace with Sony (which is up in the air worldwide).

Im think these investors are only going to turn around on Xbox if it starts selling pretty unprescidented numbers for a game console. Like 20 million in the first 2 years.


I just dont see that happening with such a strong Sony.
Click to expand...

you must work on wall street with investor knowledge as razor sharp as this
 
D

Dance Inferno

Unconfirmed Member
Darklord said:
I wonder that too. The 360 has high sales, xbox live brings in millions in subscribers alone, decent first party sales, kinect was the biggest hardware launch in history, but it's down 2 billion every year? I don't get it.
Click to expand...

Those are all revenues. You don't know how much it costs them to run that entire division. If this is true, then it must be a lot.
 
Mugatu

Mugatu

Member
Makes sense when you view MS as a conglomerate that doesn't really care any more about any markets its in - it only wants to be in everything and to win everything.
 
T

twofold

Member
vcc said:
There is more to the brand than just the hardware and studios. Xbox has brand recognition, corporately has contacts and relationships with manufacturers and distributors and retail. If the price is right that could save the years of work and billions of dollars required to build that stuff out.

Valve is just dipping their toes in right now; the problem with licencing others to make your machine like the 3DO is that its guaranteed to be more expensive in comparison because the manufacturers needs to take a cut off the top; they don't get a slice of the software sales which Sony, MS, and Nintendo use to competitively price their machines.
Click to expand...

Let me explain how Valve thinks things are going to play out in the future. It'll explain why they're making the decisions they are.

Valve doesn't see a future for consoles. They think that Apple/Amazon/whoever are going to come in and steal away a huge portion of the console market, making the old console business models obsolete and unsustainable.

To quote --

During a lecture given at the University of Texas, Newell said that "Apple has gained a huge amount of market share, and has a relatively obvious pathway toward entering the living room with their platform." He said "I think that there's a scenario where we see sort of a dumbed down living room platform emerging — I think Apple rolls the console guys really easily." Valve's challenge, Newell explains, is to make progress getting a PC in the living room, and to "figure out better ways of addressing mobile." Valve could have an uphill battle to get there, but based on what we know about the Steam Box, it could have several hooks to get people's attention.
Click to expand...

http://www.theverge.com/2013/1/30/3934496/valve-gabe-newell-apple-steam-box-threat

Valve is setting themselves up to be the hardcore games platform of choice should the consoles fail. They don't want to get involved in the console business, and who would blame them? Sony lost ~$5 billion last generation, Microsoft has lost untold billions on the Xbox brand, and Nintendo is on its way to irrelevancy, if recent performance is any indication. There's no promise that the PS4 and the Xbox One are going to succeed, either.

Why would they take such a big risk by entering the console market based on its recent performance? It just wouldn't make sense.

As for distribution, developers, publishers, and what not. Do you not think Valve already has those contacts? Steam has 65 million active users. It's not some piddly little piece of software used by a small number of gamers. Valve has been talking to developers, publishers and manufacturers about SteamOS and Steam Machines for more than three years now. They don't need Microsoft's contacts at all.
 
S

Skeff

Member
Mass Effect said:
So the question is, what happens if this strategy fails? Do the investors finally say "get rid of it [the Xbox division]" or do they try again or what?

What would be the more likely scenario in that case?
Click to expand...

IMO, I think they'd get rid of it if it can't achieve what it was designed to do, How they refocus their resources I have no Idea and it depends largely on the next CEO and what business strategy they decide to go with.

famousmortimer said:
For all the talk of "nintendo is doomed" we hear... it seems pretty safe to assume that if either the xbox one or ps4 tank - that company is leaving the industry as a hardware maker.


Nintendo, on the other hand, will keep putting along.
Click to expand...

I agree with this, failure for PS4/XB1 will likely end up with them leaving the dedicated gaming market, I think Sony could continue as a publisher with a wealth of development studios and sell insurance. I think Microsoft would get rid of everything, purely because of the financial strengths of the companies.
 
E

EGM1966

Member
Paco said:
Hmmm....I don't think being the single entertainment hub has been the long-term consumer entertainment goal for a few years now. It seems it's more about building up the service concept of Live Anywhere (games, movies/tv, music, etc.), which they announced years ago, across a number of devices. Recall the 3 screens and a cloud strategy from the early 2000s.

The living room isn't going away, so it makes sense to have a device available there and Microsoft thought it was the best place to enter the market. They were too narrowly focused on it, but it would be monumentally stupid to pull out of the living room if they want to be in the video game industry at all. Why? Because Google and Apple are and will continue to make inroads across all devices.
Click to expand...

But do they really want to be in that? I agree on services/store but again I think they're in a real pickle remotely getting traction there. The main established online stores are all accessed via mobile devices - Apple and Google respectively - and there seems very little evidence people are falling over to sit in front of their TV to do so. If anything I'd be willing to bet shopping channels for TV addicts would still be the main approach for TV based purchases. Mobile devices are just easier and more flexible - particularly because you can touch them and quickly input to them.

TBH as I said I really think the XB1 is now a device designed for a market that never came about and doesn't look like it will.

All the stats I've seen show second screening is how people prefer to shop while watching TV and that's a well established trajectory vs what MS is trying with XB1 via a TV.

I know hindsight is cheap but it seems to me now that MS needed to get into tablet/mobile much earlier and with much more speed/aggression and that they should have focused on home PC (either desktop or laptop) as a companion to their devices in the home (which would have built on their strengths and allowed for easier and faster synergy) vs taking this huge, long and slow route to build a (highly contested and competitive) home console presence as their route to then get customer to services/shops.

Even looking at their concept videos for shopping, etc. via Xbox/TV I feel they're missing the direction of the market - again it looks like something from a SF movie of a stylized, Epcot home of the future vs where the trends seem to be going.

Like I said I believe they could be a strong player in games console - but I'm currently of the view it really doesn't make a whole lot of sense for them vs putting a lot more effort into mobile OS/store & services access.

Heck, even looking at this gen IIRC PS3 and Wii saw more use for Netflix and the like than 360.

A home console will at best be just another option in my view, and likely never the main one, to access such services, and that's the issue for the future of Xbox in my view : MS is putting arguably too much time/money/effort into a lesser channel while they are still being slaughtered in the main channel - i.e. tablets/mobile devices.
 
A

AranhaHunter

Banned
IvorB said:
Looks like Sony has not escaped...

http://www.digitaltrends.com/mobile/zte-android-patent-license-microsoft/

http://www.theguardian.com/technology/2013/apr/24/zte-android-patent-microsoft

A cross licensing deal is where one each party agrees to use the other's patents without fee.
Click to expand...

So seems like only Moto is left that hasn't signed. Seems like everyone else signed without much of a fight with the possible exception of B&N. I think Moto will fight it until the end though due to the patents being very broad and it being a Google subsidiary. Not sure why MS went after the OEMs and not the makers of android, google, directly though.
 
F

famousmortimer

Banned
Guevara said:
But can you really say the same for Sony? Kaz was the Playstation guy before becoming CEO, and Sony is a consumer products company. And they've been at it longer.

I just don't see their situations as equivalent.
Click to expand...


I can say the same for Sony. In fact Shu gave a fairly rousing speech to the entire Playstation division at the start of the year that boiled down to "this is our last shot, make sure we get EVERYTHING right."


Sony's financials aren't good. Kaz likes playstation, yes, but it was 11th out of 12 divisions last year. It needs to perform or it will get axed.


And to their credit... sony has had a pretty goddamn good year. I wish the NY Giants would bring Shu in to give them a pep talk.
 
V

vcc

Member
twofold said:
Let me explain how Valve thinks things are going to play out in the future. It'll explain why they're making the decisions they are.

Valve doesn't see a future for consoles. They think that Apple/Amazon/whoever are going to come in and steal away a huge portion of the console market, making the old console business models obsolete and unsustainable.

To quote --



http://www.theverge.com/2013/1/30/3934496/valve-gabe-newell-apple-steam-box-threat

Valve is setting themselves up to be the hardcore games platform of choice should the consoles fail. They don't want to get involved in the console business, and who would blame them? Sony lost ~$5 billion last generation, Microsoft has lost untold billions on the Xbox brand, and Nintendo is on its way to irrelevancy, if recent performance is any indication. There's no promise that the PS4 and the Xbox One are going to succeed, either.

Why would they take such a big risk by entering the console market based on its recent performance? It just wouldn't make sense.

As for distribution, developers, publishers, and what not. Do you not think Valve already has those contacts? Steam has 65 million active users. It's not some piddly little piece of software used by a small number of gamers. Valve has been talking to developers, publishers and manufacturers about SteamOS and Steam Machines for more than three years now.
Click to expand...

I'm aware the principle reason for SteamOS is to provide a alternative to Windows in case MS decides to close off the system. Windows 8 seems to be laying the ground work there.

The idea they'd buy up the remnants of Xbox if it fails hard is just fanciful day dreaming.

Valve is full of smart people and they're still small and sleek so they can adapt better than Goliath like Sony, MS, and Nintendo. Their stance could change if the price is right. but it's just idle speculation.

They don't need Microsoft's contacts at all.
Click to expand...

They don't have the same relationship with retail and distributors and their contact with manufacturers isn't the same. Just things like warehouse space, shipping contracts, warehouse space near the manufacturer, etc... Those things take time and money to establish. Amazon, Google, and Apple have those things already.
 
M

Mudkips

Banned
soundscream said:
Oh god this again.

This chart isn't how businesses operate, everything is based off each fiscal year.
Click to expand...

As you were told, it is FY.

soundscream said:
Not that total part, which is why the chart is pointless.
Click to expand...

So adding a total line makes the chart pointless? Why? Ignore it if you don't think it's relevant. From an investor's perspective, that's pure folly though.

The chart clearly shows the massive losses associated with launching a new console, and the difficulty in turning those losses into profits over the generation. Any investor would be keen to know such information.
 
T

twofold

Member
vcc said:
I'm aware the principle reason for SteamOS is to provide a alternative to Windows in case MS decides to close off the system. Windows 8 seems to be laying the ground work there.

The idea they'd buy up the remnants of Xbox if it fails hard is just fanciful day dreaming.

Valve is full of smart people and they're still small and sleek so they can adapt better than Goliath like Sony, MS, and Nintendo. Their stance could change if the price is right. but it's just idle speculation.

They don't have the same relationship with retail and distributors and their contact with manufacturers isn't the same. Just things like warehouse space, shipping contracts, warehouse space near the manufacturer, etc... Those things take time and money to establish. Amazon, Google, and Apple have those things already.
Click to expand...

Valve's Steam Machines are going to be like Google's Nexus line (well, pre Nexus 7, anyway). Sold in smaller quantities directly to consumers.

Valve's announcing Steam Machine partners at CES, and I'm expecting companies like Samsung, Acer, MSI, Asus, and Lenovo to be on that list. If that's the case, they won't need anyone's contacts to get on store shelves.
 
V

Vizzeh

Banned
famousmortimer said:
I can say the same for Sony. In fact Shu gave a fairly rousing speech to the entire Playstation division at the start of the year that boiled down to "this is our last shot, make sure we get EVERYTHING right."


Sony's financials aren't good. Kaz likes playstation, yes, but it was 11th out of 12 divisions last year. It needs to perform or it will get axed.


And to their credit... sony has had a pretty goddamn good year. I wish the NY Giants would bring Shu in to give them a pep talk.
Click to expand...

Surely alot of that is attributed to the cell development and possibly blueray? Each im guessing without those costs should make next gen profitable very early, especially with the reported demand.
 
F

famousmortimer

Banned
Vizzeh said:
Surely alot of that is attributed to the cell development and possibly blueray? Each im guessing without those costs should make next gen profitable very early, especially with the reported demand.
Click to expand...

Yeah, I don't think they are particularly worried as of now. But my point was that going into this gen if the PS4 bombed... there wouldn't be a PS5. After the PS3 being in the red most of its life - another 8 years of a console hemorrhaging money would be all Sony could take - even with Kaz at the helm.


I don't think we need to worry about it at this point.
 
S

serversurfer

Member
gofreak said:
Hmmm.

Rick Sherlund is the analyst who seems to be well sourced with regard to ValueAct, the activist investor that successfully lobbied for a seat on the board and was linked to Ballmer's exit.

He also seems to always offer commentary that has shared ValueAct's world view.

Now that ValueAct is inside MS and would have access to all kinds of information, I wonder if he got this information from one of his ValueAct friends - and/or if it's part of a campaign to publicly sully perception of the Xbox business among investors. He has previously said that ValueAct wants to get rid of the Xbox business and he has agreed with that idea.
Click to expand...
ValueAct owned almost $2B worth of MS stock. Even before they got inside MS, they probably had a pretty good idea of how XBox was performing, even if they didn't have detailed balance sheets.

Basically, since gaining their position inside MS, their narrative has gone from "XBox is losing millions" to "XBox is losing $2B."

antipode said:
Rick Sherlund is even closer to Microsoft than that. He's close friends with Bill Gates and his family, dating back to when he worked at Goldman Sachs.
Click to expand...
Hmm.
 
C

Can Crusher

Banned
famousmortimer said:
Yeah, I don't think they are particularly worried as of now. But my point was that going into this gen if the PS4 bombed... there wouldn't be a PS5. After the PS3 being in the red most of its life - another 8 years of a console hemorrhaging money would be all Sony could take - even with Kaz at the helm.


I don't think we need to worry about it at this point.
Click to expand...

History is full of success stories, where at the edge of the abyss a company/person evades "death" and comes back for glory. PS4 seems to be in the best track possible to become just that.
 
S

soundscream

Member
Mudkips said:
As you were told, it is FY.



So adding a total line makes the chart pointless? Why? Ignore it if you don't think it's relevant. From an investor's perspective, that's pure folly though.

The chart clearly shows the massive losses associated with launching a new console, and the difficulty in turning those losses into profits over the generation. Any investor would be keen to know such information.
Click to expand...

Yes it does show the cost of getting into the business, but as it shows since 08 it has made a profit each year. And as I have said you don't gauge that when looking at profitablity, when the fy is done the money is gone profits & loss, the only thing that matters is the most recent fy, and since 08 the Xbox has been in the black each fy.
 
C

Curufinwe

Member
EGM1966 said:
Out of curiosity, do you think the bolded is even possible anymore? I'll admit I don't : I think tablets and Smart TVs alone never mind phone and other mobile devices have now rendered this a false goal.

Do you think there really is a huge worldwide market for a single device like the XB1 sitting under your TV?
Click to expand...

For a lot of people the DVR is what owns the living room.
 
G

Gaz_RB

Member
vcc said:
For the history of the brand, for every problem money is the answer.

Which rapidly leads to having no money.
Click to expand...

I think a big part of them losing money recently is probably because of the XB1. These losses at the beginning of a gen are not unique to Microsoft. They make plenty of money off Xbox. And for every problem, money is usually the answer for any company... You have to spend money to make it. They wouldn't buy these exclusives, etc (which is what I assume you are referring to) if they didn't think it would make them money. Which it usually does.
 
F

FStop7

Banned
gofreak said:
Hmmm.

Rick Sherlund is the analyst who seems to be well sourced with regard to ValueAct, the activist investor that successfully lobbied for a seat on the board and was linked to Ballmer's exit.

He also seems to always offer commentary that has shared ValueAct's world view.

Now that ValueAct is inside MS and would have access to all kinds of information, I wonder if he got this information from one of his ValueAct friends - and/or if it's part of a campaign to publicly sully perception of the Xbox business among investors. He has previously said that ValueAct wants to get rid of the Xbox business and he has agreed with that idea.
Click to expand...

I think ValueAct is behind this. They're either airing Microsoft's dirty laundry in order to get what they want (the elimination of the ED division) or they're lying to get what they want.
 
V

vcc

Member
Gaz_RB said:
I think a big part of them losing money recently is probably because of the XB1. These losses at the beginning of a gen are not unique to Microsoft. They make plenty of money off Xbox. And for every problem, money is usually the answer for any company... You have to spend money to make it. They wouldn't buy these exclusives, etc (which is what I assume you are referring to) if they didn't think it would make them money. Which it usually does.
Click to expand...

MS seems more direct with it than other companies. Sony and Nintendo rely a lot on their internal studios and the money hatting isn't as common. They both will co-market games but generally they don't throw around money nearly as much as MS.
 
E

EchoedTruth

Banned
Ishan said:
either there is some serious misreporting going on

because last i knew x360 was super profitable so was xbox live.

unless xboxone r and d took such a toll .... if its true nintendo is well off buying off the xbox division and putting their first party on them .... and that would be a legitimate contender to ps4 ...

honestly tho .... I dont see the xbox division still hemorrhaging this badly ... bing yes ... but not the xbox division. (and we all know how much they still keep trying to win the bing battle)
Click to expand...

Now THAT would be cool.

Nintendo + Xbox vs. PlayStation
 
S

szaromir

Banned
vcc said:
MS seems more direct with it than other companies. Sony and Nintendo rely a lot on their internal studios and the money hatting isn't as common. They both will co-market games but generally they don't throw around money nearly as much as MS.
Click to expand...
Nintendo and Sony pay moneyhats as well. How do you think WiiU and 3DS got those Sonic games?
 
Fox Mulder

Fox Mulder

Member
Guevara said:
I really think we could see MS exit the console space this gen. It all depends on their next CEO, and how hands off Ballmer and Gates are.
Click to expand...

they've done some shitty things recently, but it would be sad to see. Who else would step up willing to lose billions of dollars to establish themselves.
 
S

Sydle

Member
EGM1966 said:
But do they really want to be in that? I agree on services/store but again I think they're in a real pickle remotely getting traction there. The main established online stores are all accessed via mobile devices - Apple and Google respectively - and there seems very little evidence people are falling over to sit in front of their TV to do so. If anything I'd be willing to bet shopping channels for TV addicts would still be the main approach for TV based purchases. Mobile devices are just easier and more flexible - particularly because you can touch them and quickly input to them.

TBH as I said I really think the XB1 is now a device designed for a market that never came about and doesn't look like it will.

All the stats I've seen show second screening is how people prefer to shop while watching TV and that's a well established trajectory vs what MS is trying with XB1 via a TV.

I know hindsight is cheap but it seems to me now that MS needed to get into tablet/mobile much earlier and with much more speed/aggression and that they should have focused on home PC (either desktop or laptop) as a companion to their devices in the home (which would have built on their strengths and allowed for easier and faster synergy) vs taking this huge, long and slow route to build a (highly contested and competitive) home console presence as their route to then get customer to services/shops.

Even looking at their concept videos for shopping, etc. via Xbox/TV I feel they're missing the direction of the market - again it looks like something from a SF movie of a stylized, Epcot home of the future vs where the trends seem to be going.

Like I said I believe they could be a strong player in games console - but I'm currently of the view it really doesn't make a whole lot of sense for them vs putting a lot more effort into mobile OS/store & services access.

Heck, even looking at this gen IIRC PS3 and Wii saw more use for Netflix and the like than 360.

A home console will at best be just another option in my view, and likely never the main one, to access such services, and that's the issue for the future of Xbox in my view : MS is putting arguably too much time/money/effort into a lesser channel while they are still being slaughtered in the main channel - i.e. tablets/mobile devices.
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I agree with you.

I'll add that the living room seems to be the ONLY place RIGHT NOW where MS can maintain a foothold to continue building the brand's value, because they have little to no presence on PC and mobile. They simply don't have the IP power to go services only right now, but they could in the years to come.

If you look out 20 years everything will be streamed and there will be multiple digital store fronts that allow you to buy, sell, trade, and rent all forms of entertainment and immediately start playing, watching, listening, etc. Amazon, Apple, Valve, and Google will each have these unified ecosystems. The differentiation must be in the content and how you experience it.

Microsoft has to continue building IP, with entries in different mediums that make their ecosystem attractive across devices. You can see this line of thinking with things like SmartGlass, Halo games, Halo TV series, Quantum Break game and TV series (I would be willing to bet Alan Wake comes back in a similar fashion). Would you be all that surprised to hear of Perfect Dark coming back with a focus on spy/gadgetry, with a game and TV series? With ways to watch and play on any device.

And the living room. This is too easy -- imagine Kinect is the only "console" you buy, with Xbox as the delivery service (you can buy controllers as accessories). I think interactive entertainment, or gamification of TV seems like something people could get into. How do you think kids would react if they could watch Yo Gaba Gaba, jump around and dance, get feedback from the show, and track their stats with friends? What if the show was tightly tied into a game, which gave them objectives to complete? For adults, what about game shows, where you get to play along with the contestant, blurt out your answers, and Xbox tracks how you fared against all your friends doing the same? Also see Xbox Fitness and how it tracks your stats and compares against your friends.

I don't know if interactive programming is going to make it big, but there may be something there. And Microsoft could set themselves up nicely to re-enter the PC and mobile markets for it if they continue investing in cross-platform, interactive entertainment.
 
F

fiyah

Member
twofold said:
Valve is setting themselves up to be the hardcore games platform of choice should the consoles fail. They don't want to get involved in the console business, and who would blame them? Sony lost ~$5 billion last generation, Microsoft has lost untold billions on the Xbox brand, and Nintendo is on its way to irrelevancy, if recent performance is any indication. There's no promise that the PS4 and the Xbox One are going to succeed, either.
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I would argue that bolded part right there because of the Steam Machine....saying you are not trying to enter then console market and then putting out a console-esque product conflicts itself. I see the Steam Machine as a console regardless or what Valve wants to say. The only difference is that they are giving OEM's the ability to make them and also affording users the same luxury. But I fully expect them to make it so it's almost dumb not to buy the Valve version.
It will be subsidized.
 
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